Time To Transform The “Traditional” HR Operating Model?

Last year, our team at Egon Zehnder set out to discover the key trends shaping the future of HR. We had hundreds of conversations with industry leaders around the globe, and what we heard comprised some of the biggest trends in our field today, from digitization and AI, to experimentation with new HR models, and even so far as major transformations of leaders and their organizations. (You can read the full findings in the article we published in Fall 2021.)

What do these trends mean for the future of the HR Operating Model, and how do they shape the way we should organize the HR function? It’s a question that HR leaders were eager to answer. They were either enthusiastically telling us about their experiments in the area, sharing frustration with some of the traditional HR organizational models, or even seeking our advice—asking for a “silver bullet” solution to set up their HR functions in a way that could cope with the changing needs of their business clients.

Spoiler: There is no silver bullet.

To achieve change, companies need to trust and invest in their leaders, ensuring the capabilities and design of the organization can support a new model. A change in organizational design alone cannot be successful unless there is alignment throughout the business.

As HR leaders consider what might be best for their companies going forward, they will have examples to potentially draw from. Today, there are HR operating model experiments as progressive as they are interesting. With curiosity piquing as HR collectively begins to reset using learnings from Covid-19, we lay out some of the possible alternatives HR leaders have today when setting up or revisiting the HR operating model.

Is this the end of the three-pillar HR organizational model?

As one seasoned HR leader told us during our study, “If you needed to set up the HR operating model for an organization 10 years ago, you would simply look at the three-pillar template of the David Ulrich model and tweak it to your organization.” The pillars of HR Business Partnering, Centers of Expertise and HR Operations used to fit the reality of virtually any organization. But as today’s HR leaders know, it’s not always that simple anymore.

It’s an insight that we explored more in-depth in our Fall 2021 study:

“For one thing, the siloed structure of the model runs counterintuitive to the growing emphasis on connectedness, company culture, and employee experience. Now more than ever, businesses want effective, well-rounded HR teams rather than those consisting of isolated experts, and one of the primary obstacles to achieving this has to do with how roles are assigned within the traditional model. The role of HRBPs, for example, has been greatly complicated by shifting expectations in the field—particularly because of Covid-19. Because remote and hybrid work arrangements are almost entirely new, at least at the scale being witnessed today, there are no truly qualified experts to address the various challenges that can arise. And with not all employees returning to the office, how can HRBPs continue to make sure people are feeling positive, connected, and oriented toward continued development. As one leader of a multinational company points out, “They will need a lot of innovation to replace walking the halls.”